Major Indices :: Sensex : 15644, Nifty : 4942
Intermediate Trend :: Sideways
Key Technical Levels :: 16111- on the upside, 15350- on the downside
In our last review, when the Sensex was at 15289, we had stated, “Prima facie, the downside is restricted. The bulls will have their “say” only when the falling channel (see chart) is broken on the upside. If surpassed, the next target will be 15873-16064”.
As expected, the Sensex decisively broken the falling channel and flared up to 16452, over and above our targeted area.
For the last 2 weeks, after the Sensex created a recent low of 14677, we have been vouching for the selective buying (25-30%) in frontline stocks, on every fall/sharp intraday cuts. We will continue to do the same, in future also, with protecting longs near 14500-14600 levels (intermediate stop). As far as extremely short term trend is concerned, the equations are still favoring the bulls, provided the Sensex holds itself above 15350-15465- short term stop (gap up opening area).
From medium to long term perspective, the downside seems to be protected near the recent low of 14677-14500. The recent run up of almost 12% in the Sensex indicates the “Smart money” is active on the buy side. Typically, these “strong hands” create a sharp volatility and nerve wracking environment, to “accumulate” the stocks at reasonable levels and push away the “weaker hands” out of the market. Yesterday’s fall of over 4% was an ideal example of this “shakeout” process. One can survive and digest these sharp swings, only if one is having broader horizon of investment. Traders can wait, till the situation becomes less risky.
Conclusion: Intermediate trend is yet to confirm bullishness; downside is restricted up to 14677-14500. In the extreme short term, expect 15350 to act as a support, if holds then first challenge for the bulls is to close above 16111 & then 16683.
